Dynamic Pricing at Restaurants Is Becoming More Common

QSRs are experimenting with increasing prices during periods of peak demand.

March 12, 2024

San Diego-based Cali BBQ is the latest in a string of QSRs to experiment with dynamic pricing models, reported the Wall Street Journal. Surge pricing has long been used by airlines, hotels and ride-sharing apps to alter the price of services based on demand, and the technology is continuing to make its way to the restaurant space.  

The strategy can add up to more sales and increased profits for businesses.  

Shawn Walchef, Cali BBQ’s owner, said in the Journal article that “variable pricing attached online to [its] pulled-pork sandwich boosted the four-unit chain’s $30,000 in monthly delivery sales by $1,500 since the company began testing it in early 2023.” 

However, not all consumers are happy about fluctuating prices, so retailers must weigh the benefits of higher revenue with “the risk of upsetting inflation-weary consumers,” wrote the Journal. 

Last month, Wendy’s said it would test dynamic pricing for its menu in early 2025. After backlash over the announcement, Wendy’s released a statement that “it has no plans to increase prices during the busiest times at its restaurants,” Fortune reported. Instead, the company said that the dynamic pricing is about having prices go down at certain times, not raising prices at times when customers visit the most.  

Many chains are using the technology specifically for delivery orders. Since first testing dynamic pricing on its delivery app last year, Bartaco increased “to-go prices on its taco packs by between 5% and 10% during weekend peak hours and discounted them during slower weekday afternoons. Revenue from sales made through apps has been up 4% to 6% every month since the 31-unit chain started using dynamic pricing, and customers haven’t complained,” wrote the Journal.

Supermarket News recently wrote about dynamic pricing, noting that a 600-unit supermarket in Norway has used it since 2012. In this case, the price, displayed digitally, falls as perishable items age.